Gov. Mike Dunleavy said he has settled for the Legislature’s proposed $1,600 permanent fund dividend but will maintain a vast majority of his original operating budget vetoes.

The governor made the announcement in a prerecorded video statement Monday afternoon. 

Last month the Alaska Legislature passed House Bill 2001 in an attempt to restore about 80% of Dunleavy’s approximately $444 million in operating budget vetoes, which he announced at the end of June. But the governor kept a majority of his cuts, citing the need to tamp down on government spending. 

“Alaskans need to understand that we can no longer afford to spend at our current rates,” Dunleavy said in the video.

Significant among the vetoes are:

• A $50 million cut to Medicaid. 

• A complete defunding of public broadcasting. 

• The elimination of the Ocean Ranger program which provides environmental monitoring of cruise ship activity in and around Alaska. 

• A $3 million cut the Village Public Safety Officer program as well as the elimination of $250,000 in supplemental funding for the program. 

• A $6.1 million cut to behavioral and mental health treatment grants. 

• A $7.4 million cut to adult public assistance. 

• The elimination of youth detention and treatment and 16 full-time and two part-time positions at the Nome Youth Facility. 

• The elimination of the state’s Medicaid funded adult dental services program assisting low income adults with receiving basic dental care. 

• A nearly $47,000 cut to rural airport maintenance. 

• A $5 million cut to the Alaska Marine Highway System. 

As recently as July 29, Dunleavy told members of the media he considered the vast majority of his budget final, but over the past week, the governor has backtracked on a number of his previous cuts, allowing the Legislature to restore funding to areas such as early education programs; the Senior Benefits program, which provides financial assistance to low-income seniors; the University of Alaska; Alaska Legal Services, which provides pro bono legal assistance to low-income Alaskans; and the Online with Libraries and Live Homework Help programs which assist rural Alaska in connectivity and education resources.  

Announced Monday, the governor will now also support the Legislature’s restoration of a number of other areas, perhaps the most significant of which is the refunding of the Alaska State Council on the Arts, which shut its doors last month after losing all state funding. At the time, the closure made Alaska the only state in the nation without a state funded council on the arts. 

The governor also passed the Legislature’s restoration of $2.2 million in Human Services and Community Initiative matching rants which assist communities in providing support to local nonprofit resource agencies such as domestic violence treatment, homeless shelters and low income housing. Due to the governor’s original veto, Fairbanks’ only homeless youth shelter The Door had announced possible closure due to significant losses in state funded grants.

Dunleavy had originally announced his intention to sign the bill by the end of last week, but, according to the governor’s press secretary, the bill was still under review at that time.

The governor told reporters last week his intention with the extensive vetoes was not to cause “angst,” but rather to force a conversation among Alaskans about budgetary priorities.

Dunleavy said he and his team had been working on this for some time and stepping back on cuts to the university, Senior Benefits, and other areas is not related to the quickly growing recall effort launched Aug. 1. The recall effort recently gained enough signatures to turn its legal brief and first state petition over to the courts.

The governor said he hopes to begin the budget process earlier next session, with the goal of releasing a budget in December, in an effort to avoid late-in-the-year budget decisions such as these, according to Dunleavy spokesman Matt Shuckerow. Dunleavy released his budget this year on Feb. 13.


What's going on with the dividend? 

The Legislature included a $1,600 dividend in its version of the bill, which the governor reluctantly agreed to, noting that only the Legislature has the appropriation power to add money to the operating budget.

“If I had the authority to add more money to the budget for a full PFD, I would,” Dunleavy said.

The governor called the dividend amount “incomplete” but acknowledged that vetoing the amount likely would have meant a lengthy delay in Alaskans receiving a dividend this fall. 

Dunleavy has previously stated he feels the dividend should be separate from the operating budget, noting that he feels the annual payout should still be based on the 1982 statute setting the current projected dividend amount at approximately $3,000. 

Dunleavy said he plans to call a third special session later this year to address the dividend once more with the goal of introducing and passing legislation that makes up the difference between the approved $1,600 dividend and the $3,000 statutory dividend he originally promised.

The legislation has not been finalized, Shuckerow noted in a Monday email to the Daily News-Miner, and a plan for distribution of the supplemental amount has not been outlined. Details would be included in the bill itself, he noted. 

Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.